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With airfares no longer so cheap, travellers tilt towards trains

Passenger numbers for the Railways rose 14% on a year-on-year basis to around 36 million in May
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First Published: Mon, Jul 16 2012. 12 12 PM IST
Passenger numbers for the Railways rose 14% on a year-on-year basis to around 36 million in May. Ramesh Pathania / Mint
Passenger numbers for the Railways rose 14% on a year-on-year basis to around 36 million in May. Ramesh Pathania / Mint
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Story Highlights

  • Economy-class airfares have increased by 40% in the past 6 months
  • IRCTC recorded 6.22 mn bookings in May compared with 4.02 mn bookings a year earlier
  • India had 740 mn domestic travellers in 2010, according to the tourism ministry
New Delhi: Aditi Bhargava, a Pune-based information technology (IT) professional, used to fly every alternate weekend to Delhi, where she would join her sister on an overnight train journey to Allahabad to visit their parents.
That stopped last month. Bhargava is now catching a train instead to Allahabad from Pune following a surge in airfares. The train trip takes around 24 hours, while the Pune-Delhi flight takes about two hours.
“Earlier, I used to get a round trip for Pune-Delhi in around Rs 9,000. Now, the one-way ticket alone costs more than Rs 6,500,” she said. “Since it has become too expensive, I now travel by train while going and take a flight back to adjust my budget and time.”
The Pune-Allahabad train journey costs around Rs 1,800 by two-tier AC and around Rs 1,200 by three-tier AC.
Bhargava is not the only one changing the way she travels and tweaking itineraries. Railways officials and travel industry executives say many travellers are preferring trains to flights because of the surge in airfares.
photoEconomy-class airfares have increased by 40% in the past six months and business class fares by 20%, primarily due to an Air India Ltd pilots’ strike and Kingfisher Airlines Ltd’s financial crisis that have resulted in a sharp drop in the number of flights, according to industry experts.
The hike in airfares has boosted demand for railway tickets, K.H. Muniyappa, minister of state for railways, said on Tuesday.
Two senior Railways officials said the trend has strengthened over the last two months, with increased demand seen for first- and second-class AC accommodation.
“With the substantial hike in airfares and the general uncertainty in the civil aviation sector, airline passengers are migrating to railways,” said one of the officials, who didn’t want to be named.
“If you look at increasing railway demand and decline in air passenger numbers, combined with the fact that since last two-three years people had been moving towards the higher mode of transportation, you can see a marginal shift happening here from air to trains for middle and upper-middle class,” said Deepak Jain, a research associate with PhoCusWright, a travel industry research firm.
The number of passengers carried by domestic airlines has been falling since December, and in May it dropped 0.9% to 5.45 million from the year-ago period, according to the Directorate General of Civil Aviation.
Passenger numbers for the Railways, on the other hand, rose 14% on a year-on-year basis to around 36 million in May, with the rise in all AC classes in double digits. Among all AC classes, the number of passengers in the three-tier AC coaches recorded the highest increase of more than 15%.
“This shift can be attributed to the combination of three forces—the peak season for travel, high airfares because of the demand-supply gap, and uncertainty associated with operations of flights, which has made people apprehensive of buying air tickets even if prices are low, as in the case of Kingfisher,” said Jain. “And the Indian travel market is still driven by prices.”
Travel industry veterans also said the shift is bound to happen as low airfares were the primary reason for people from the middle to upper-middle class opting for air travel.
“Originally people shifted to air travel because of low rates,” said Nalin Shinghal, director (tourism and marketing), Indian Railways Catering and Tourism Corp. Ltd, a public sector unit that primarily handles e-ticketing for the Railways. “With airfares so high, people shifting to trains again is bound to happen.”
According to the latest report by the Internet and Mobile Association of India, IRCTC recorded 6.22 million bookings in May compared with 4.02 million bookings a year earlier. Online booking of air tickets, however, rose to 1.67 million from 0.92 million.
Sunil Bajpai, group general manager, Centre for Railway Information Systems, the IT arm of the Railways, said this shift is most likely to apply in two scenarios—one, when rail timings are convenient and airfares for the same route are very high, and secondly, a short journey of four hours or so to a nearby satellite town, which is far costlier by air than rail and not significantly shorter.
One of the railway officials cited above confirmed that the shift has been decided in the case of shorter journeys. “For routes such as Delhi-Chandigarh, Delhi-Jaipur and Delhi-Lucknow, passengers who used to travel by air are now booking tickets on trains due to the increased fares,” said the official.
The increasing waiting lists and high passenger pressure have forced the Railways to add extra coaches to accommodate the demand. In June, a total of 284 extra AC coaches, including nine first-class ones, were added to trains originating in Northern Railway (NR), the biggest railway zone in terms of route length.
Analysts feel that the situation in the Indian travel industry is not going to change much in the near term. “For the time being and in the near term, until these low-cost carriers get more supply for the domestic sector, there is definitely going to be a shift towards train travel,” said PhoCusWright’s Jain. “It may take six-nine months or even a year before prices come down and things get balanced.”
To be sure, with its pilots calling off their strike, Air India could compete fiercely on price as it seeks to woo back passengers.
Still, the recent trend is attracting investors and those who want to tap into the business opportunity.
Manish Rathi, co-founder of Railyatri.in, a start-up that has partnered with the Railways to provide real-time train information, said he was looking at providing more value-added services to train passengers as their needs are changing.
“We would be providing a service which will help a traveller choose the most appropriate train with respect to time and comfort,” Rathi said. “Another feature would tell train travellers the chances of their waiting list (tickets) getting confirmed. It would be based on historical train data, which we have got from the Railways. This is the right time for us to launch, as travellers who are opting for trains expect more convenience.”
India had 740 million domestic travellers in 2010, according to the tourism ministry. This number is projected to go up to 1,451.46 million by 2016. The Railways, which has around 8,500 trains and more than 20 million daily riders, remains the most widely used mode of passenger transport within the country.
moulishree.s@livemint.com
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First Published: Mon, Jul 16 2012. 12 12 PM IST
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